If there’s one thing guaranteed to turn a grey January morning even greyer, it is the annual press conference to release the World Economic Forum's Global Risks Report. Even the view from the 17th floor of the News Building in London Bridge cannot lift the lugubrious mood as highly paid globetrotting executives line up to tell us, essentially, that we are all doomed.
The report, sponsored by insurers Marsh & McLennan and Zurich, is supposed to set a worthy agenda for next week's World Economic Forum conference in Davos. It presents the results of an annual survey of 1,000 'decision-makers from the public sector, private sector, academia and civil society'. Risks are categorised by impact and likelihood (on the healthy assumption that the most catastrophic events are also the least likely) and on one-year and 10-year horizons.
Not surprisingly given the events of 2018, 85% of decision-makers spotted 'worsening economic and political confrontations between major powers' as a bigger risk in 2019. Over the longer term, the top three trends are changing climate, increasing 'cyber dependency' and what is described as the increasing polarisation of societies.
The message, though couched as a question, is that the world is sleepwalking into a crisis. Some of the examples of sleepwalking are all too familiar - our inability to organise on a global scale to mitigate and adapt to climate change. But there are a couple of unexpected entries, including international dispute resolution, highlighted as an area of 'particular concern'. The report notes that the centre of gravity in dispute resolution is shifting from the West to Asia, for example China's establishment of two new international courts to handle commercial disputes related to its Belt and Road Initiative. 'If cross-border trust is eroded by geopolitical competition and diverging values, creating mutually accepted dispute-settlement mechanisms may become increasingly complicated,' the report comments with some understatement.
Another inevitable theme is the impact of technology. At this morning's press conference Borge Brende, a Norwegian former politician who presides over the World Economic Forum, conceded that technology is a powerful contributor to economic growth. But an inescapable message of the report is that digital innovation is the root of much evil. 'Addiction and empathy' is one chapter's title.
Inevitably, the authors accept as a truism that humankind is living through a period of unprecedented technological change. This is tosh: the period of 1880-1914 ushered in a far wider spectrum of innovations, albeit ones that initially affected only a small segment of humanity, than we have seen in the past 30 years. But there is a grain of validity in the concerns it raises about the potentially wide impact of a handful of over-arching innovations. A good example is over-dependence on an inadequate critical information infrastructure: disaster waiting to happen.
The rapidly emerging field of machine learning ('artificial intelligence') poses its own meta-set of risks. Among the possible 'future shocks' that may await us is apparently emotionally responsive artificial intelligence, or 'affective AI'. 'Oppressive governments could deploy affective computing to exert control or whip up angry divisions,' the report warns.
It is all worthy stuff, but the Global Risks Report needs to be taken with two pinches of salt. An obvious easy jibe is that this year's is the 14th edition and, despite 14 years of doom-watching, we are still here. In fact, by many non trivial measures such as child mortality, adult literacy and enthusiasm for killing fellow human beings, humanity is in a healthier place than it has ever been. We need to remember civilisation's ability to nurture progress as well as risks.
The other criticism is in the decision-makers apparent faith in 'collective action' as the self-evident way to mitigate risks. 'There is a more urgent need than ever to renew the architecture of international cooperation,' Brende says. Obviously such cooperation is essential if we are going to be serious about, for example, reducing CO2 emissions. But we also need to be aware that creating supra-national architectures comes with its own risks - particularly of hijack by societies with different values to our own - and heavy opportunity costs.
For all that, the Global Risks Report is an interesting, even essential, read. Happy January.